Successful companies know how to turn a negative into a positive. Organizations that try to attract expanding companies know how to do the same thing.
When the Country Music Association decided to take its annual awards show from Nashville, Tenn., to New York City last year, Music City officials did not sit around and lament the loss.
Instead, they viewed the situation as an opportunity for Nashville to gain exposure in the Big Apple. The Nashville Area Chamber Of Commerce organized a business recruiting mission tied to the awards show. About 250 site location consultants and business prospects were treated to a lunch that featured some of country music’s biggest stars.
It was just one example of how the Nashville metro uses its assets — country music has been one of the city’s biggest assets for decades — to attract relocating companies. And the metro has raised business attraction to an art form during the past three years.
During that time, eight $100 million-plus revenue corporations have moved to the Nashville metro, several 1 million square foot distribution center operations have begun operations and, at a time when many metros are hemorrhaging because manufacturing operations are shutting down, Nashville continues to pick up such operations. Plus, numerous 100- and 200-job expansion projects continue to flock to the metro.
“The fact that our economy is diversified has helped us keep good, steady growth,” said Janet Miller, senior vice president for economic development for the Nashville Area Chamber of Commerce. “We haven’t been on any wild swings. It is critically important to diversify because industries ebb and flow. We try to predict what is going to happen but none of us really knows.”
| During that time, eight $100 million-plus revenue corporations have moved to the Nashville metro, several 1 million square foot distribution center operations have begun operations and, at a time when many metros are hemorrhaging because manufacturing operations are shutting down, Nashville continues to pick up such operations. |
The Nashville strategy has been successful, to say the least. That success has led prominent site location consultants to give the metro the No. 1 ranking in Expansion Management’s eighth annual “America’s 50 Hottest Cities” listing. It is the second consecutive year that the Middle Tennessee metro has been selected to the top spot.
Expansion Management surveyed more than 80 site location consultants in order to find out which cities their clients find most attractive when it comes to selecting an expansion or relocation site out of the nation’s more than 360 metropolitan statistical areas. The consultants, whose identities remain confidential, were asked to take into consideration factors such as business climate, work force quality, operating costs, incentive programs and the ease of working with the local political and economic development establishment.
| Top 10 Hottest Cites
1. Nashville-Davidson-Murfreesboro, Tenn. MSA
2. Phoenix-Mesa-Scottsdale, Ariz. MSA
3. Atlanta-Sandy Springs-Marietta, Ga. MSA
4. Dallas-Fort Worth-Arlington, Texas MSA
5. San Antonio, Texas MSA
6. Charlotte-Gastonia-Concord, N.C.-S.C.
7. Memphis, Tenn.-Miss.-Ark. MSA
8. Jacksonville, Fla. MSA
9. Knoxville, Tenn. MSA
10. Birmingham-Hoover, Ala. MSA
SOURCE: Expansion Management poll of 80 site location consultants, November 2005
|
Phoenix, Atlanta, Dallas-Fort Worth-Arlington and San Antonio, Texas, round out the top five. Once again this year, cities in the South and West dominate the listing. The top 19 cities in the listing are from those regions.
Success Breeds Success
When a company decides to relocate to the Nashville metro, officials quickly try to recruit its executives onto the team trying to attract the next investment.
“When we have success, we try to fold the leadership of that company — be it a 30- or 1,000-person operation — into our sales team,” Miller said.
Jim Beard, president of Caterpillar Financial Services Corp., helped convince Bret Comolli, CEO of Asurion Corp., to relocate to Nashville three years ago. Comolli, in turn, helped convince Carlos Ghosn, CEO of Nissan, that Nashville was the right place for the automaker’s North American headquarters facility.
Nissan announced in November that it will relocate the headquarters facility and 1,300 jobs from Los Angeles to Franklin in the Nashville metro. The relocation will begin later this year, with Nissan temporarily moving to downtown Nashville while it builds a permanent facility in the Cool Springs area of Franklin.
The automaker has a 25-year history in Tennessee, with plants in Smyrna and Decherd. Those two plants employ more than 8,000 workers. Nissan’s plant in Canton, Miss., is less than 450 miles from Nashville.
Currently, Nissan employees are deciding whether to relocate to Nashville. The automaker hopes for a 50 percent retention rate, said Fred Standish, director of corporate communications for Nissan North America. Once in Nashville, the company will begin hiring to fill the vacant positions.
“Resumes started coming in the day after we made the announcement (Nov. 10),” Standish pointed out. “We’re confident that we will find the work force we need in Nashville.”
Standish said that employees that make the move from California will find a high degree of quality of life in Middle Tennessee.
Tom Jurkovich, director of the Office of Economic Development for the mayor of Nashville, said there are few cities in the country where one will find a number of attractive qualities in one location, including centrality of location, a solid transportation infrastructure and a high number of colleges and universities.
“We’ve achieved a quality of life that makes Nashville attractive to raise a family,” he said. “This equates to a conducive environment to do business. There was time when we treated those concepts separately. But with the mobility of the work force, what businesses are looking for is an environment where they can attract talent that wants to have a quality setting to raise their families.”
Knoxville, Memphis See Expansions
As a state, Tennessee has a vibrant economy that is attracting relocating companies.
“We have found that Tennessee has a business-friendly climate,” Standish said.
With Memphis (No. 7) and Knoxville (No. 9), the state has 30 percent of the listing’s top 10. (Jackson, Tenn., ranked No. 42.)
“The perceptions and advice of the nation’s leading business location consultants make a real difference,” said Mike Ragsdale, mayor of Knox County, Tenn. “Becoming the country’s ninth ‘Hottest City’ clearly shows that we’re moving in the right direction, developing a bright future and promoting the Innovation Valley as a region.”
Automotive supplier DENSO Manufacturing Tennessee, a subsidiary of Japan-based DENSO Corp., will undertake a $185 million expansion of the its Knoxville metro’s manufacturing complex in Maryville. The expansion will result in the construction of a 220,000 square foot addition to the company’s 1.5 million square feet of existing manufacturing space and the potential hiring of up to 500 employees beginning late next year.
The state’s FastTrack Job Training and FastTrack Infrastructure programs will be used in the DENSO expansion.
Also in Marysville, Newell Rubbermaid announced in January it will expand its manufacturing operations by 200 jobs. The decision increases the company’s presence in the Knoxville metro area to nearly 800 employees.
On the other side of the state, International Paper will relocate its global headquarters to Memphis from Stamford, Conn., brining 95 executive-level jobs to the metro. International Paper joins FedEx and AutoZone as the third Fortune 500 company to have its corporate headquarters in Memphis.
The Memphis/Shelby County Industrial Development Board approved a 15-year tax freeze that will give the company the flexibility to grow the years ahead, according to the company.
Jacksonville, San Antonio Enjoy Banner Year
Metro areas that are successful in attracting expansions have numerous advantages going for them. Some of those advantages are natural — location — and some are the product of years of effort — creating an environment that produces a highly skilled work force.
Those advantages are wasted unless the metro puts them to use to grow its economy and, by extension, the quality of life for its residents.
Jacksonville, Fla.’s, (No. 8) location, high quality of life and exceptional infrastructure make it one of the best places in the nation to live and do business, said Mayor John Peyton.
| “Our status as an intermodal transportation hub, our low cost of living and our consolidated government set us apart from the rest of the state and make us one of the most business-friendly spots in America.” — John Peyton, Mayor of Jacksonville, Fla. |
“Our status as an intermodal transportation hub, our low cost of living and our consolidated government set us apart from the rest of the state and make us one of the most business-friendly spots in America,” he said.
Fidelity National Financial certainly believes that. After relocating its corporate headquarters from Santa Barbara, Calif., to Jacksonville in 2003, the company has announced plans to add 800 new jobs in the metro.
Fidelity National Information Services (600 jobs), the company’s information technology unit, and the corporate division of Fidelity National Financial (200 jobs) are expanding. The move represents a capital investment of more than $60 million. Since moving to Jacksonville, Fidelity has brought more than 1,200 jobs to the metro.
“Jacksonville offers a great combination that so many companies are looking for — a strong business climate, low cost of doing business and a highly desirable quality of life,” said Jerry Mallot, executive vice president of the Cornerstone Regional Development Partnership. “We can give businesses not only a place to move, but also a place to grow. This is why Jacksonville is consistently on the short list and often the final choice.”
Diversity is a strength of San Antonio’s (No. 5) economy. As the eighth-largest city in the country, its economic base includes a healthy mix of business services, a significant biomedical and biotechnology network (with a $13.7 billion economic impact), a wide-ranging manufacturing sector, competitive information technology services and a growing financial services market.
Most recently, San Antonio has seen some of the nation’s largest job creation, including the continued impact by Toyota Motor Manufacturing, Texas. The past year saw the addition of three new on-site suppliers for a total of 21 suppliers and an $850 million investment.
Washington Mutual announced the creation and has begun hiring the 3,000 workers it needs for a regional operations center, and the National Security Administration announced an expansion last year, bringing 2,000 jobs to the metro.
“San Antonio-based operations are able to combine high productivity with an extremely competitive cost of doing business to achieve long-range profitability,” said Mario Hernandez, president of the San Antonio Economic Development Foundation. “The city’s strategic location along the NAFTA corridor, strong transportation infrastructure and available real estate provides a geographic advantage for growing companies.”
The Regional Approach
One of the common strengths that many of America’s Hottest 50 Cities have is their regional approach to site location. Instead of the primary city and its suburban counterparts bickering over a potential project, they work together because they know in the end, everyone in the metro area benefits — no matter where the project is sited.
Jobs Now! is the first coordinated, regional economic development strategy in the Knoxville-Oak Ridge metro area, also known as Innovation Valley, and its investors include more than 170 private and public partners. The aim of the program is to increase jobs and capital investment in the region.
“This has allowed us to pool resources, avoid duplicating efforts and really engage business leaders in economic development,” Knoxville Mayor Bill Haslam said. “We believe this is just the beginning of our success.
“We’ve worked really hard in Knoxville to think and act regionally in our economic development efforts, to leave our egos and our logos at the door, and I believe that’s paying off for our community,” he added.
Nashville’s Miller said the regional approach extinguishes the city and county lines — lines that mean nothing to an expanding company.
She pointed to the relocation of Louisiana Pacific in 2004. The company put its corporate headquarters in downtown Nashville (Davidson County), its research and development facility in Williamson County, its corporate jet hangar in Rutherford County and a number of executives live in Sumner County.
“If you are squabbling and backbiting, nobody will land the deal,” she said. “At the end of the day, everybody [in the region] benefits in you work together on a project.”
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